Estate Planning: The Ultimate Gift for Your Family

A complete estate plan is one of the most meaningful ways parents can protect their family.  According to recent surveys, despite 64 percent of Americans believing that having a will is important, only 32 percent actually have one.

“Estate planning isn’t just for the wealthy,” says Scott Ente, Senior Vice President, David Lerner Associates. “It’s about making sure your wishes are carried out and your loved ones are protected, regardless of your asset level.”

A basic estate plan includes:

• A will that directs how assets should be distributed
• Powers of attorney for financial and healthcare decisions
• A living will or advance healthcare directive
• Beneficiary designations on retirement accounts and insurance policies

For parents with minor children, naming guardians in a will is crucial. This ensures children will be raised by someone the parents trust if something happens to both parents.

Trusts: Protection Beyond a Simple Will

Trusts offer parents additional control over how and when assets are distributed. They can:

• Protect assets from creditors
• Provide for children with special needs
• Manage assets for minor children until they reach responsible ages
• Reduce estate taxes for larger estates

Many parents don’t realize that a will alone may not provide the protection they want for their children. A trust can ensure funds are used for specific purposes like education, and can distribute assets gradually as children reach certain milestones.

New Parents: Financial Planning Shifts

Becoming a parent can change everything—including financial priorities. New parents should:

1. Update or create a will naming guardians for their child
2. Review life insurance coverage—most financial experts recommend coverage of 10-15 times annual income for new parents
3. Start a college savings plan like a 529 plan
4. Build emergency savings covering 3-6 months of expenses
5. Check beneficiary designations on all accounts

Digital Assets: The New Frontier

Modern estate planning must address digital assets. Parents should create a plan for:

• Online financial accounts
• Digital photos and videos
• Social media accounts
• Cryptocurrency holdings
• Email accounts

Password managers can help organize this information securely.

Start the Conversation

Adult children may want to have meaningful conversations with their parents about their wishes and plans. While these discussions can be difficult, they’re important.

Questions to ask include:

• Do you have an up-to-date will?
• Where do you keep important financial documents?
• Have you considered long-term care insurance?
• Do you have preferences for medical care that should be documented?

These conversations show care and concern, and can prevent difficulties later.

As parents, your true legacy lies not just in financial assets but in the values, memories, and security you provide for your family. Proper estate planning ensures that the legacy continues exactly as he intended.

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Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.